Boston College, Carroll School of Management

Protocol Labs: the Future of Decentralized Network

Get excited everyone, not even in a week we will off to California! What’s even more exciting is for our first official schedule, we will be meeting with Jesse Clayburgh, one of co-founders of Protocol Labs and FileCoin. I believe it is important we know what it is before we head to California and have a dinner with! I recommend reading @paulosdbc’s blog post before/after reading mine because CoinList is closely related to what I’m about to talk about. I will be talking more details about Protocol Lab and FileCoin and our guest Jesse Clayburgh!

What is Protocol Labs?

Dan once explained in his blog that that Protocol Labs is a “creator of groundbreaking internet protocols like Filecoin.” Let me explain in details why it’s called groundbreaking company, with a number of projects they are currently working on. Protocol Labs points out, despite its usefulness, Internet is becoming more centralized and vulnerable. More and more people go on the internet, or clients, go on the server, and do whatever they need to do from playing game to internet shopping. However, the more complicated and the more users use the Internet, the more single point failure, which means if one fails the whole system will fail to work, can occur Protocol Labs is a research, development and deployment company, whose goal in an overarching sense is to upgrade the internet into decentralized internet, or decentralized storage network (DSN).

Decentralized Storage Network (DSN)

The key to blockchain technology is decentralization. First it was financial systems and payments. Next came decentralized apps and programs that could run on the blockchain. Now, another frontier is opening with the decentralization of file storage. The decentralized storage space has rapidly become a crowded race, and FileCoin, Storj, Sia all compete for market share.

DSN by shares a file across a peer-to-peer network. First, the uploader encrypts the file, and that person retains the key to unlock the encryption. Then the file gets broken into many smaller pieces. Each of these small encrypted pieces gets duplicated so that the same file is copied everywhere. Finally, the file pieces get sent to various individual computers on the network. Those individuals hosting the files only have a small part of the file’s contents, and it’s encrypted. I know this is a lot of technical information, but bare with me!

Decentralization of network means (a) host can’t get the information directly from the (b) launching an attack against a hosting node would be pointless. To recall a file, the original uploader uses a private key along with what is called a blockchain-hosted hash table to locate all the shattered pieces together and ask the network to reconstruct the file. Once the nodes send back the various shards, the file gets retrieved. Then the uploader uses the original encryption key to decrypt the file for use.

Projects (From the left top icon)

Filecoin is a cryptocurrency-powered storage network. It can be easily understood as “data storage coins.” Users will give up on the unused data storage in their hardware to the network, and the company will pay them with FileCoin in return.

rPlanetary File System (IPFS) is a new protocol to decentralize the web. Many of you probably have heard of this protocol when you have seen the race to secure US climate data on IPFS shortly after Trump came to office, or more recently you may have seen IPFS being used to bring Wikipedia back online in Turkey. IPFS has also already seen widespread adoption in the decentralized space and has become a key protocol for that ecosystem.

and other projects like libp2p, IPLD and the Multiformats Project….

Additionally, CoinList is a protocol token fundraising platform. SAFT (Simple Agreement for Future Tokens) is a legal framework for protocol token fundraising. Dan explained about CoinList in full detail in his blog post! Please go check it out!

Who are we meeting with?

Not much information was available on the internet, yet through what would have illegal in real life (stalking on the Internet) I found some information about him! Jesse is a graduate from Stanford University, actively involved in the club Business Association of Stanford Entrepreneurial Students (BASES) . While he was attending Stanford, he had always been someone that everyone wanted to be in the same team of. After he graduated from Stanford, he got his first job at American Express as a software engineer. After two years working at American Express, he founded AngelList, CoinList and Protocol Labs, launching FileCoin along with other co-founders. He continuously carried out passion for entrepreneurship, and I’m super excited for what he will have in store for us TechTrekers!

FileCoin

FileCoin, cryptocurrency-powered storage network, had one of the most successful ICO’s ever, raising $205 million in its token sale.

Competitors

Storj – Storj doesn’t support mining. Instead, its farmers undergo file audits. If the farmer can prove their computer is online and holds a copy of the given file, then they’ll receive a payout. It is also one of the oldest projects in the space. To date, Storj has a community of 20,000 users (uploaders) and 19,000 farmers (storage providers).

Sia – Sia is Storj’s biggest competitor and supports SiaCoin. In contrast to Storj, Sia developed its own blockchain. Over the course of 2017, Sia grew from 75 hosts and 500 TB of storage up to 1,000 hosts and 3.3 PB(petabyte; 250 bytes; 1024 terabytes!!!) of available storage.

Conclusion

The future of decentralized storage and P2P network looks promising. It has the potential to be faster, cheaper and more secure storage for broad adoption. It is so interesting to see how blockchains are being utilized in such variety of fields. It is well known that the accumulation of data around the world is sky-rocketing, and it seems like DSN is the next solution to take care of such fast growing data. I’m very excited to have a talk with Jesse for the very first time while we are on Tech Trek!!!

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11 thoughts on “Protocol Labs: the Future of Decentralized Network”

Great post Ashley! This is such an interesting technology it almost seems like its science fiction. When I first read it through, I kept asking myself if I was reading a bio on Pied Piper haha. I really think Filecoin has a bright future, but I am skeptical on the exact timeline that it will jump to mainstream. I can’t wait to meet Jesse and ask him about his opinions on the crypto market. I think he will have some very interesting things to say!

I also liked the part you included about possible competition as well. If this is really the future, I think competition from other companies and possibly the FAANG could jump in.

Nice post, Ashley! After reading your post, I feel like this is a really revolutionary technology! I also think it was a very smart move to create a crypto based on his business, especially with how much attention cryptos are receiving right now. I am curious as to what the dangers are of having a decentralized storage network. Does it mean that I could potentially hold a piece of a harmful file on my computer? Regardless, this is the definitely the future.

You bring up some really good points in this post! I think Filecoin’s push to get users is very interesting as well. One of the first things you see on their website is that there is a massive amount of storage being unused, and that you can use what you have to host files. They make the process seem incredibly easy for anyone to use. Also, I have similar questions as Max. What are the disadvantages to a DSN?

Interesting post, Ashley! I actually bought some SiaCoin last year! I’m personally very intrigued by the possibility of a DSN (Silicon Valley definitely piqued my interest as John pointed out). With the rise of blockchain technology and peer-to-peer networks, I have no doubt that decentralization will grow in prominence. I’m excited by the prospect of a DSN and the associated projects, and I can’t wait to ask Jesse more about them!

This post taught me a lot about DSN and you explained the basic process of it very well. The various types of DSN that you listed are intriguing. I think it comes down to what the user perceives to be the most protected and safest DSN to store their files. I read an article that Storj while by definition is decentralized, in practice, it is actually more similar to centralized data storage due to its payout policies. Storj payout is more set and is issued directly between Storj and the users monthly. However, Filecoin utilizes real-time pricing that follows the market and the different interactions the files exchange between. Can’t wait to met with Jesse and talk about all of these differences!

Great post on a highly technical subject, Ashley! I learned so much about something I had no previous knowledge on. I’m really excited to meet Jesse and hear more about what Protocol Lab and FileCoin are doing. It is so cool that he founded AngelList, too! AngelList’s mission is to democratize the investment process which fits in with the theme of decentralization. It has been a great resource for me throughout this class!

Cool post, Ashley! For someone who knew very little about Protocol Labs, I found it to be super informative and all-encompassing.

In terms of the company’s future, I’m personally interested to see how they go about acquiring users and educating individuals: much of the elements that they have to offer (such as CoinList) are somewhat futuristic and high-level, which could make it harder to bring the average consumer on-board. Hopefully Jesse can provide some insight into how they plan to approach that! Awesome job again.

Incredible post! I did not know much about DSN and this blog helps me to udnerstand it much better! I wonder if the speed of such decentralized network will be affected by as the number of users increases. This is the case for some cryptocurrency when the increase in user base requires more complicated encryption, resulting in longer time to mine.

Great way to explain such a technical subject! I’m very curious about how the internet became more centralized—especially since it was originally developed specifically to be decentralized using packet switching. Is the difference between traditional TCP/IP packet switching and blockchain DCNs essentially just the addition of encryption? Could the same conditions that lead to the internet becoming more centralized happen to blockchain, and what would the impact be?

Ashley, awesome job! What a great follow-up to my post and presentation on CoinList. You explained the idea behind decentralized storage networks with great clarity! I also had heard of SiaCoin before, being a cryptocurrency investor (I saw it on one of the exchanges I trade on). Interesting to learn that it’s a direct competitor with Filecoin! I’m so excited to meet Jessie and ask him questions about this space. Awesome work!